EPA regulates like the wind

The Supreme Court handed down a big ruling on EPA regulations for smokestack emissions on Tuesday, which the Associated Press described as “an important victory for the Obama Administration in controlling emissions from power plants in 27 Midwestern and Appalachian states that contribute to soot and smog along the East Coast.”

The rule, challenged by industry and upwind states, had been cast by foes as an attempt by the Obama administration to step on states’ rights and to shut down aging coal-fired power plants. Opponents said the decision could embolden the agency to take the same tack later this year when it proposes rules to limit carbon pollution. EPA Administrator Gina McCarthy has said the agency will be flexible and work with states on the first-ever controls on power plants for the gases blamed for global warming.

On Tuesday, the court upheld a rule adopted by the EPA in 2011 that would force polluting states to reduce smokestack emissions that contaminate the air in downwind states. Power companies and several states sued to block the rule, and a federal appeals court in Washington agreed with them in 2012.

The Supreme Court reversed that decision. Writing for the majority, Justice Ruth Bader Ginsburg acknowledged the complexity of the problem before EPA.

“In crafting a solution to the problem of interstate air pollution, regulators must account for the vagaries of the wind,” Ginsburg wrote.

The high court said the EPA, under the Clean Air Act, can implement federal plans in states that do not adequately control downwind pollution. But the court also ruled that the EPA can consider the cost of pollution controls and does not have to require states to reduce pollution by the precise amount they send to downwind states.

Regulations based on the vagaries of the wind? That doesn’t sound like a recipe for capricious bureaucracy at all. It also sounds fabulously expensive:

The new downwind pollution rule was triggered by a federal court throwing out a previous Bush administration regulation. The Bush-era rule has remained in effect while the courts have weighed challenges to the latest version, and EPA officials said the Bush rule would remain in place while they digested the Supreme Court’s opinion.

The new rule would cost power plant operators $800 million annually, starting in 2014, according to EPA estimates. Some $1.6 billion per year has been spent to comply with the 2005 Bush rule.

Actually, it’s going to cost power customers $800 million annually, as operators pass along the costs. The cost of energy is already skyrocketing, thanks to the War on Coal, dumping $1200 electric bills on the luckless residents of certain chilly suburbs. The L.A. Timeswarns that Californians could be looking at a 47 percent increase in the cost of electricity over the next 16 years, “in part because of the state’s shift toward more expensive renewable energy.” Federal officials warn that “we are now in an era of rising electricity prices.” Why not just drop another $800 million a year on the backs of consumers, along with their jacked-up health insurance premiums and all the other costs they’re expected to bear? Let’s see just how far America can stagger under the load before her knees give out. The new dominant economy-in-waiting, China, will enjoy watching the show.

Writing for the majority, Justice Ginsburg argued that giving individual states a chance to devise their own emission-control plans would be more costly and complicated than giving control to the federal bureaucracy. Dissenting Justices Clarence Thomas and Antonin Scalia didn’t buy that argument. (It was a 6-2 decision because Justice Samuel Alito recused himself, possibly because he owns stock in an electric company that would be affected by the decision.)

The press obsessed over Scalia’s erroneous citation of a precedent he wrote – he said the EPA argued in favor of considering cost when it issues Clean Air Act rules in that earlier case, but in fact it was the trucking industry that wanted costs taken into account; the EPA argued that money should be no object to its regulatory agenda, and won. With that error corrected in the current revision of Scalia’s dissent from Tuesday’s decision, maybe the media can begin discussing what he actually said, because it’s powerful stuff:

Too many important decisions of the Federal Government are made nowadays by unelected agency officials exercising broad lawmaking authority, rather than by the people’s representatives in Congress. With the statute involved in the present cases, however, Congress did it right. It specified quite precisely the responsibility of an upwind State under the Good Neighbor Provision: to eliminate those amounts of pollutants that it contributes to downwind problem areas. But the Environmental Protection Agency was unsatisfied with this system. Agency personnel, perhaps correctly, thought it more efficient to require reductions not in proportion to the amounts of pollutants for which each upwind State is responsible, but on the basis of how cost-effectively each can decrease emissions.

Today, the majority approves that undemocratic revi­sion of the Clean Air Act. The Agency came forward with a textual justification for its action, relying on a farfetched meaning of the word “significantly” in the statutory text. That justification is so feeble that today’s majority does not even recite it, much less defend it. The majority reaches its result (“Look Ma, no hands!”) without benefit of text, claiming to have identified a remarkable “gap” in the statute, which it proceeds to fill (contrary to the plain logic of the statute) with cost-benefit analysis—and then, with no pretended textual justification at all, simply ex­tends cost-benefit analysis beyond the scope of the alleged gap.

Additionally, the majority relieves EPA of any obligation to announce novel interpretations of the Good Neighbor Provision before the States must submit plans that are required to comply with those interpretations. By accord­ing the States primacy in deciding how to attain the gov­erning air-quality standards, the Clean Air Act is preg­nant with an obligation for the Agency to set those standards before the States can be expected to achieve them. The majority nonetheless approves EPA’s promul­gation of federal plans implementing good-neighbor benchmarks before the States could conceivably have met those benchmarks on their own.

Perhaps it’s quaint, at this point in the growth of the Leviathan State, to ask whether the federal bureaucracy actually has the legal authority to impose regulations that sound like a really good idea, or to find it remarkable that truckloads of federal power would be driven through tiny gaps created by a single ambiguous word in a statute – in this case, as Scalia puts it, “the ambiguity of the word ‘significantly’ in the statutory requirement that each State eliminate those ‘amounts’ of pollutants that ‘con­tribute significantly to nonattainment’ in downwind States.”

It would be extraordinary for Congress, by use of the single word “significantly,” to transmogrify a statute that assigns responsibility on the basis of amounts of pollut­ants emitted into a statute authorizing EPA to reduce interstate pollution in the manner that it believes most efficient. We have repeatedly said that Congress “does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes.”

On the contrary, it seems like every legislative mouse hole hides a herd of elephants these days. Scalia goes on to assert that if there was no logical way for states to comply with the relevant portion of the Clean Air Act as it was written by Congress, then “I know of no legal authority and no democratic principle that would derive from it the consequence that EPA could rewrite the statue, rather than the consequence that the statute would be inoperative.” If Tuesday’s ruling sets a new precedent that bureaucrats do have a free hand to rewrite legislation they consider unworkable, there are going to be mastodons pouring out of those mouse holes in the future. Scalia warns about the potential for abuse of the massive discretionary powers the majority ruling has given to the federal bureaucracy, seeing no obstacle to the EPA giving states only days or hours to come up with compliance plans before slapping a federal plan in their faces.

At the risk of wading into the precedent Scalia incorrectly cited in the first draft of his dissent, I think what he might have wanted to spotlight is the difference between citizens asking for regulations to be implemented with consideration for the financial burden laid upon them, and a federal agency declaring,”Never mind what our enabling legislation actually says, we’re going to come up with a cost-effective regime we think would work better than what Congress empowered us to create.” It’s no surprise to see every legal ambiguity resolved in favor of more centralized power, or for “arbitrary” limits on its authority swept aside before the oncoming storm of the federal government’s boundless good intentions.